I, I think I'm not surprised that there is absolute
unanimity in the central banking constituency to say that central
bank independence would is absolutely key.
The last episode where we could see the bad consequences
of absence of central bank independence was in the occasion
of the first oil shock and the second oil shock.
So it's a long time ago, I would say since
the years 70s and the beginning of the 80s.
Clearly we have a consensus at the global level that
central bank independence is by far the best for the
our fellow citizens, for the economy and for the stability
and financial and the price stability of the entire economies
of the world.
And there is a very strong consensus on that.
I'm not surprised at all to see that the central
bank governors, including the governor of Don de France, Christine
Lagarde, Jean Claude and the Bank of England, have, I
would say, backed the declaration of J Power, the courageous
declaration of J Power.
Jean Claude, I'm going to challenge you and lovely to
see you because I think you have seen this before.
I think we've all seen it before in places like
Turkey where President Erdogan basically sacked the central bank governor
and decided he knew more about central banking policy and
monetary policy than the bankers as well.
The the the consequences were near catastrophic for the Turkish
economy as well and have been wherever politicians have got
involved in monetary policy.
Does it not need Wall Street and others to point
out the potential downside to the US president of his
actions?
Yes, of course.
And by the way, the declaration of Alan, of Ben
and Janet Yellen on this episode, dramatic episode, they have
to say of relationship between executive branch and the Fed.
They say this is how monetary policy is made in
emerging markets with weak institutions, that I would really stress
weak institutions because Turkey is clearly a case in point
that you you are very wisely mentioning.
So of course you have at the level of some
countries, some emerging markets with weak institutions and quoting Allan,
Ben and Janet, yes, you have seen that I was
Speaking of, I would say, the very core of the
international.
And amongst the white settle that you have many emerging
markets also with strong institutions and of course I am
mentioning the advanced economy consensus which is very strong.
New consensus to to have a definition of price stability
amongst the main the major central banks that are issuing.
2% or around 2% in the medium term.
So this is very important.
We had a consensus since a long period of time
and now we are in a situations where the very
important economy and country and democracy that is the US
is trying to change the game.
And it is really absolutely dramatic.
It's bipartisan.
The opposition was bipartisan and, and, and then were appointed
by Republicans and Janet by the Democrats.
And, and we, we have really something which is extremely
grave at the global level, not only at the level
of the US.
Jean Claude, you mentioned weak institutions as part of your
context for what we have observed in Turkey.
That's to to Steve's point.
How would you characterize the market's perception of US institutions
at this stage?
Do you think that the market has lost confidence in
the US institutions, namely the Federal Reserve as an independent
body?
And if not, what would cause the market to lose
confidence in the Fed as an independent institution?
I think that when you look at day-to-day market, clearly
the market has not lost yet the I would say
confidence in the US institution.
There is clearly a battle which is taking place.
Jay Powell did exactly what in my opinion, was the
best in the circumstances, with moderation, but very firmly he
expressed his views.
And I have to say that nobody yet knows exactly
how the Liza Cook issue will go in the Supreme
Court.
If I'm not misled, maybe I'm not totally informed, but
we we see that it is work in progress.
And of course, if the Fed loses, if it is
clearly to be observed, a Federal Reserve, that would be
the most obedient servant of the executive branch, which is
not what is expected in the United States Constitution.
the Fed depends, it seems to me, on the Congress,
not on the executive branch.
So we will have to see exactly what happens.
But but the situation is extremely grave.
And the the last statement of Jamie Dimon also expressing
largely in my opinion, the medium term sentiment of the
month.